RBI monetary policy committee meeting: Governor Shaktikanta Das to disclose decisions today. What to expect?

Governor Shaktikanta Das, who is leading the Reserve Bank of India monetary policy committee (MPC) meeting, will disclose its decisions on Friday, December 8.

The bi-monthly MPC meeting started on Wednesday and the decision on rates will be announced on Friday. Das will announce MPC’s decision regarding the key interest rates, GDP and inflation forecast post the completion of the pane’’s three-day bi-monthly meeting.

The RBI hiked the repo rate last on February 23, when it was raised to 6.5 per cent.
According to the report by Deutsche Bank, the interest rate cycle appears to have peaked and the RBI is unlikely to go for further hikes, unless absolutely necessary. The rate is likely to be cut in June, it said.

Most experts also agree that the RBI is unlikely to reduce interest rates in this MPC meeting. “We expect the repo rate to be on hold at 6.5 per cent, and liquidity to remain tight with the call money rate trending higher than the repo rate. We also expect the stance to remain an unchanged ‘withdrawal of accommodation’ given liquidity remains tight.

RBI may focus more on tweaking macro prudential norms, to address some excesses in the system. It has already raised risk weights on certain lending”, HSBC chief India economist Pranjul Bhandari said in a note dated December 5.

With the RBI continuing to maintain tight liquidity, short-term rates are hovering around 6.85-6.9 per cent, which is 35-40 bps higher than the repo rate.

According to a Reuters poll, the RBI will hold the key policy rate at 6.50 per cent for a fifth consecutive meeting.

Traders anticipate a hawkish undertone to the policy guidance, with the focus remaining on inflation and liquidity management.

Meanwhile, weaker economic data and softer inflation reading have led to bets that the RBI may start cutting rates in the first half of 2024, with the odds for a rate cut in March close to 61 per cent.

India’s retail inflation likely picked up in November due to higher food prices, bringing it closer to the upper end of the RBI’s 2 per cent-6 per cent target range, a Reuters poll found.

Inflation likely rose at an annual rate of 5.70 per cent in November, faster than 4.87 per cent in October, but some estimates, including that from Barclays, peg the reading at 6.15 per cent.

India continues to hold its position as the world’s fastest-growing major economy. The GDP expanded at a rate of 7.6 per cent in the July-September quarter, surpassing expectations. This growth was fueled by increased government spending and advancements in the manufacturing sector.

RBI MPC: Date, time, schedule, where to watch:
RBI MPC meeting date: The three-day meeting of the RBI’s rate-setting panel started on Wednesday, December 6 and the outcome is due on Friday.

RBI MPC meeting timing: RBI governor Shaktikanta Das will unveil the MPC decision around 10am on Friday.

RBI MPC Meeting Schedule: After the MPC decision which starts around 10am, Das will address a post-policy press conference around noon on December 8.

RBI MPC meeting live streaming link: The RBI will live stream the governor’s policy statement on RBI’s YouTube channel or RBI’s official X (formerly Twitter) handle.